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Nomura To Buy Nexen's European Commodities Trading Unit - Update

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2/14/2010 10:44 PM ET

Japan-based brokerage Nomura Holdings Inc. (NMR: Quote) said Sunday that it has entered into a binding agreement to buy Nexen Energy Marketing London Ltd. or NEML, the European natural gas and power trading unit of Canadian oil and gas company Nexen Inc. (NXY: Quote,NXY.TO: Quote). Nomura noted that the acquisition will be highly complementary to its existing commodities franchise. Financial terms of the deal were not disclosed.

NEML has trading activities in the U.K., Belgium, the Netherlands and Germany, and access to a scalable physical platform, including natural gas storage and transportation capabilities.

Nomura, which took over Lehman Brothers Holdings Inc.'s Asian and European units in October 2008, currently operates commodities businesses in Europe and Asia that are primarily focused on providing commodity solutions to the company's institutional and corporate client base. According to Nomura, the acquisition will further enhance its global investment banking franchise in the power and gas sector.

Jason Tudor, Head of Commodities in Europe, Middle East and Africa or EMEA at Nomura said, "The acquisition of NEML will immediately provide Nomura with a power and gas business in Europe and presence in our key focus European markets. It will enable us to trade with a broad range of highly regarded industrial and financial counterparties. We expect the business to significantly enhance our growing Commodities business in the region."

A report in the Financial Times said the deal is valued at about GBP35 million, or US$55 million. The deal comes as other banks expand their commodity trading desks as part of efforts to replace revenues from more traditional areas of investment banking such as equity underwriting and merger and acquisition advisory.

JPMorgan Chase & Co. (JPM) was named in December 2009 as the exclusive bidder for RBS Sempra, the joint venture commodities unit of Royal Bank of Scotland Group plc (RBS, RBS.L) and Sempra Energy (SRE).

NMR closed Friday's regular trading session at $7.03, down $0.06 or 0.85% on a volume of 2.86 million shares, while NXY closed at $21.79, down $0.19 or 0.86% on a volume of 2.19 million shares.

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by RTT Staff Writer

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